Roy Morgan Update August 1, 2023: Consumer Confidence, Inflation Expectations & Holiday Destinations

In this week's Market Research Update, we present the latest data on Consumer Confidence, Inflation Expectations & Holiday Destinations.

Welcome to the Roy Morgan Weekly Update – and we have some good news.

First, Consumer Confidence this week increased 3.2 points to 78.4 – the highest it has been for three months following a lower-than-expected ABS inflation reading for June.

The lower-than-expected inflation prompted hopes among many that the RBA would no longer have to raise interest rates.

The back-to-back increases in Consumer Confidence over the last two weeks of 5.8 points, equal to +8%, is the largest percentage increase in the index for over three years since April 2020 and the early days of the pandemic.

The RBA’s decision today will obviously have a large bearing on Consumer Confidence next.

However, despite this week’s increase, Consumer Confidence is well below the neutral level of 100 has now spent 22 weeks below 80.

This length of time in recessionary territory has only happened once before – during the 1990/91 recession.

There was also good news for the Albanese Government this week with ALP support up 1% to 53% compared to the Coalition on 47% on a two-party preferred basis.

This was the first increase for the Government since mid-June.

Government Confidence was virtually unchanged at 81.5 this week.

This is below the neutral level of 100 because a majority of 52% of Australians still believe the country is ‘Heading in the Wrong Direction’ – and only a third, 33.5%, say the ‘Right Direction’.

There was a positive response across all housing categories to the last week’s inflation number.

Consumer Confidence increased strongly for Home Owners and Renters and is now above 80 for both of these groups.

The largest increase was for People Paying Off Their Homes, up 4.5 points to 73.6 points – the highest for this group since April.

Although the latest ABS monthly inflation was down, Australians are still expecting annual inflation to be 5.5% over each of the next two years, with the weekly ANZ-Roy Morgan Inflation Expectations Index up 0.1% points to 5.5%.